A recent exchange:
Yuhui: When knowing that if someone strictly uses a trading system that its mathematical expectation is positive in a long time then he will get profit, but a question suddenly came to my mind: What will happen if everyone trades like this? Although in your book[s] you have listed several reasons why there are always many people won’t be the trend traders, but [a] positive math expectation trading system can be easily written to the computer and automatically executed by the computers now. Meanwhile, It’s said that this kind automatic trading system is already generally used in the futures market. I want to know what do you think how trend-trading will [perform] when in this condition. What’s more, I’m wondering about how your life is currently. As a successful trader are you living a free and relaxing life, or busy in dealing with the matter of your company. Finally, if possible, expecting the trend-following DVD, my address is [address] and my telephone number is [#], and my name is Yuhui (喻 辉).
Covel: My five books outline why not everyone will become a trend following trader. It’s often against human nature and people dislike drawdowns. They seem more comfortable with black swans that wipe it out all (their accounts that is). You can follow my life here: www.covel.com/podcast.
Yuhui: Thanks for replying. Have read your books again and again and some story impressed me very much. Also read the reason you list why not everyone become a trend following trader. But once upon a time I read a book and remembering that the introduction of the author saying that his average income of programming automatic futures trading system can be up to 8% per month. So I just have an idea that what if everyone trades like him in the market? Maybe this condition will never happen because people are easy to be influenced by the cognitive bias in the trading, but somehow I still feel confused about this. And here is my address in Chinese and English.
Covel: 8% a month? Not a wise goal. That will not happen on a consistent basis that you can count on.